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Bounce back in kiwifruit harvest lifts Seeka's annual profit

Monday 25th February 2019

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Kiwifruit grower and marketer Seeka reported a 27 percent lift in full-year profit as the domestic harvest volume recovered from a lull in 2017.   

The Te Puke-based company reported net profit of $7.4 million in the year to Dec. 31, up from $5.8 million in calendar 2017. Earnings per share increased to 37 cents from 34 cents. This increase was smaller than the increase in net profit because the company raised equity in the year to strengthen its balance sheet. 

Revenue was up 9 percent at $203.7 million. Earnings before interest, tax, depreciation and amortisation lifted 13 percent to $26.2 million.

Seeka packed 31.4 million trays of kiwifruit, up 23 percent on the previous year. 

The company said a key highlight was the purchase of a Northland kiwifruit packhouse, orchards, and related business from Turners and Growers Horticulture for $42.1 million.

"This significant and successful acquisition was the result of substantial planning as Seeka sought to grow its Northland operations alongside its loyal grower base. The business seamlessly transitioned mid-harvest, and performed operationally and financially to expectations," it said.

Seeka says it is further investing in the Northland business, putting nearly $20 million into the construction of a new packhouse, packing machine and coolstores over the next two years. 

In Australia, however, it faced a difficult year due to a combination of a challenging growing season and structural management issues which have now been addressed, the company said. 

While kiwifruit disease Psa-V has been confirmed in a small area of the Australian orchards, this had little impact on Seeka’s 2018 earnings, as it took "proactive and immediate steps to limit the impact."

It also said its banana business remains lacklustre, with Seeka impairing Glassfield’s goodwill by $946,000 in the first six months of the year.

The board announced a dividend of 12 cents per share, unchanged from 2017. The dividend is fully imputed and will be paid on March 22.

In November last year, Seeka announced a three-stage plan to repay debt and strengthen its balance sheet. It raised $47.9 million in a rights issue and now has 29.32 million shares on issue. Its net debt - bank loans less bank deposits - is now $79.1 million, versus $83.1 million a year ago. Total assets increased to $269.8 million, versus $222 million. 

The shares last traded at $4.60 and have lifted 7 percent so far this year. 


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